OC Register: "Flood insurance about to become mandatory"

Thousands of property owners throughout Southern California would be forced to buy flood insurance under a bill to resuscitate the debt-ridden national flood insurance program.

If signed into law, HR 3121 would require homeowners living in areas protected by dams, levees and man-made structures to buy insurance from the national program, even if the risk is minimal.

Some Orange County homeowners, primarily in Huntington Beach and Fountain Valley, are already required to buy flood insurance because of poor drainage or federally backed mortgages. But the bill would expand the mandatory insurance area to most of north Orange County, including the entire cities of Garden Grove, Fountain Valley and Westminster.

Different versions of the bill were approved by both houses of Congress and are now before a conference committee, which is expected to hammer out a final version by late September. The Senate added the provision that more homes be mandated to buy flood insurance.

Under that plan, property owners throughout North Orange County would have to pay flood insurance premiums ranging from roughly $150 to $800 per year, although the flooding risk in some of those areas is as little as .2 percent in any given year.

The actual insurance rates and zone boundaries have not yet been set by the Federal Emergency Management Agency. The Register, with the aid of Orange County Public Works officials, used federal flood plains maps to decipher where the boundaries might be.

"This is catastrophic," said Rep. Dana Rohrabacher, R-Huntington Beach, who voted against the bill. "This is liberal Democrats grasping to put more money into the pot. We shouldn't be punishing California for a weakness in the levees in Louisiana."

Sanchez said the original bill, introduced by Rep. Maxine Waters, D-Los Angeles, exempted areas protected by the Prado Dam and improvements along the Santa Ana River, which runs through much of Orange County.

Sanchez voted in favor of the House version and now is campaigning for the conference committee to remove the Senate provision that would force her district to buy flood insurance.

"We worked so hard to put hundreds of millions of dollars into the Prado Dam, the Seven Oaks Dam and the Santa Ana River to alleviate the need for flood insurance," Sanchez said.

Supporters of the provision to require insurance in areas protected by man-made structures pointed to the current devastation along the Mississippi River, where the waters have swallowed levee after levee.

"Homes and businesses located behind levees and dams are at great risk of flooding. However, homeowners and businesses are often unaware of the risks to their properties and are not (now) required to purchase flood insurance," said Sen. Christopher Dodd, D-Conn., who is chair of the Senate banking committee. "When these man-made structures fail, the effects can be dangerous and devastating."

In addition to expanding mandatory insurance, the bill would forgive the $17.5 billion in debt from Hurricane Katrina owed by the National Flood Insurance Program. Interest alone on that debt is $900 million a year, according to an analysis by the Senate banking committee.

The bill would also reauthorize the insurance program for another five years. One of the main provisions would provide funds to redraw decade-old flood maps, now considered inaccurate and dated.

Insurance subsidies would be phased out and premiums could be raised by 15 percent a year, up from 10 percent. Deductibles also would be raised.

The Senate analysis said the bill would increase the amount of premiums collected and reduce the cost of claims.

"What they may have been trying to do is get more people in the pool to make the whole thing solvent," said Congressman John Campbell, (R-Irvine), who voted against the plan.

Butch Kinerney, FEMA spokesman, said broadening the pool of those required to buy insurance wouldn't help much in the case of another Katrina.